The Competition Commission of India has called for an investigation of Google following allegations of abuse of its market dominance. This was in response to a complaint filed by Winzo, a gaming company. Winzo alleges that Google’s developer policy is one-sided, and it restricts developers of real money games or RMG from offering their applications on the Play Store. Though the competition regulator has intervened, the Winzo-Google dispute is really the product of India’s growing digital governance and policy gaps.
The Public Gambling Act of 1867 outlaws gambling in India. However, it also carves out an exception for games of skill, noting that these cannot constitute acts of gambling and are, therefore, exempt. In a game of skill, a player’s acumen, strategy, or proficiency determine the outcome, while games of chance are typified by luck and a high degree of unpredictability. Courts typically must determine whether a game falls into the category of chance or skill. For instance, horse-racing, rummy, and fantasy sports have been deemed games of skill. But, the skill-chance dichotomy can only be decided case-by-case, leading to uncertainty for games where such decisions have not yet been made.
Fragmented legal environment
Several online real money games are banned in states such as Tamil Nadu, Kerala, and Andhra Pradesh. Each of these bans has been challenged in court, with some being overturned, such as Tamil Nadu’s initial blanket ban, while others remain sub-judice. In 2023, the Ministry of Electronics and Information Technology also amended the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 to include provisions for real money gaming. Broadly, these rules enabled gaming companies to form self-regulatory bodies that would serve as a registration and recognition mechanism for different types of real money games. However, these have not yet been enforced because of policy inertia. If they were passed tomorrow, the Competition Commission of India (CCI) would have no scope for intervention in the Winzo case.
Google’s actions, by its own admission, are a response to the legal uncertainty surrounding real money games in India. For instance, Winzo accuses Google of arbitrarily selecting certain games such as fantasy sports and rummy for a pilot under which they are made available through the Play Store. However, both rummy and fantasy sports have been recognised as games of skill by different courts across the country, which is probably why Google decided to admit them to its pilot.
It is clear, then, that the Google-Winzo dispute is not a matter of unfair competition, but one of regulatory indecision, as it has been brought on because of the absence of law creating a means of recognition for games of skill. The dispute can possibly only find resolution by the passage of the gaming amendment to the IT Rules. As such, the CCI’s intervention in the Winzo case stands unfounded.
Also read: Dream11 to PokerBaazi—Indians have a new online gaming addiction. And they are losing big
Legal gaps in digital space
A 2021 investigation against WhatsApp for introducing a ‘take it or leave it’ privacy policy, presents yet another case where the CCI intervened to fill a governance gap in the digital domain. WhatsApp’s new privacy policy indicated that its data would be shared with other companies owned by its parent Meta, such as Facebook and Instagram, and that users could either accept these terms or discontinue using the service. At the time, when the CCI announced the decision to delve into WhatsApp’s privacy policy revision, India was debating a draft data protection bill, which would have invalidated WhatsApp’s ‘take it or leave it’ policy. The Digital Data Protection Act 2023 (DPDP Act), which is expected to come into force soon, would also prohibit WhatsApp from forcing users to give consent.
Unsurprisingly, experts point out that the CCI’s decision in the WhatsApp case is in conflict with the DPDP Act. Specifically, the Act allows users to consent to data sharing. But, the CCI’s order prohibits WhatsApp from sharing data with other Meta group companies even if users grant consent.
The competition regulator must abstain from deciding on matters that fall within other legal domains. Regulators typically only have one type of statutory toolkit to solve a problem. For the CCI, it is the principles of competition set out under the Competition Act 2002. These principles are not appropriate for every dispute. They apply to a fixed set of contexts. When a regulator delves into matters that are beyond this regulatory perimeter, unintended consequences ensue. These could be legal conflicts, such as in the WhatsApp privacy case, which may require protracted legal battles to resolve. In the matter of real money gaming, such unintended consequences could be far more sinister, as the sector is riddled with spurious actors that have led many Indians to financial ruin.
The competition regulator must accept the limitations of its legislative mandate: It must deal with matters firmly within the realm of competition and desist from deciding those that fall beyond its jurisdiction, particularly where there is a legal vacuum. And the government must move quicker to legislate on emerging tech, to limit such disputes from coming to the fore, grant businesses certainty, and users’ peace of mind.
The author is the Director of the Esya Centre, a tech-policy focussed think-tank, and an advisor to Koan. Views are personal.
(Edited by Ratan Priya)